San Jose wage theft policy compromises with developers
Construction continues on a development in San Jose in this file photo.

San Jose could withhold certifications from big developers who use contractors with unpaid wage theft judgments in California under a new construction policy.

The San Jose City Council unanimously approved the “responsible construction” policy on Tuesday after first reviewing it last year. Companies found to have unpaid wage theft settlements must address those before the city can issue a final certificate on a project. Pushback from private construction companies and advocates led the city to delay and revise the policy, with changes including the exclusion of contractors and subcontractors from perjury if they falsify pay transparency certifications and removing the possibility of city fines.

The revisions were enough to win over nine of 12 private construction companies and supporters who wrote an open letter earlier this year criticizing the initial policy.

“Under the recommended approach, developers will be required to verify that contractors and subcontractors working on large construction projects in San Jose are not subject to unpaid wage theft settlements,” an updated letter to councilmembers reads. “Workers will be protected, and developers and contractors will not be unnecessarily targeted.”

San Jose became interested in expanding existing wage theft protections in 2019 after an unlicensed Hayward subcontractor working on Silvery Towers held more than a dozen workers in San Jose against their will with little-to-no pay.

“Since the original ordinance was proposed in San Jose, it’s actually passed in three other cities,” Working Partnerships Director of Economic & Workforce Policy Louise Auerhahn told San José Spotlight. “We got it delayed here, but San Jose is still the biggest city to have ever passed something like this.”

The policy expands city searches for violations from only examining violations filed with the California Labor Commissioner’s Office to include civil wage and penalty assessments and Bureau of Field Enforcement citations.

Santa Clara County Wage Theft Coalition member Forest Peterson co-authored a research paper published by Stanford University on wage theft in the county. He told said the city should consider not just wage theft settlements, but also utilize a credit-based system for developers and contractors least-likely to engage in wage theft.

“This involves using machine learning and AI, but that’s what credit reporting agencies use as well to create a cut-off where you can have a range of companies that. Before they can bid on a government contract, they really need to get a better look at them,” Peterson told San José Spotlight.

More than 12,000 Santa Clara County construction workers have been victims of wage theft since 2001, to the tune of about $46 million, labor advocates said.

“It’s going to make a huge difference in the lives of workers, and hopefully also start to change the shape and the reputation a little bit of construction in San Jose,” Auerhahn said.

Contact Vicente Vera at [email protected] or follow @VicenteJVera on X, formerly known as Twitter.

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